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在线翻译:
szdaily -> Business
Regulators ban ICOs as illegal fundraising
    2017-September-5  08:53    Shenzhen Daily

THE central bank and six other government agencies yesterday banned individuals and organizations from raising funds through initial coin offerings (ICOs), saying the practice constituted illegal fundraising.

ICOs have become a bonanza for digital currency entrepreneurs, globally and in China, allowing them to raise large sums quickly by creating and selling digital “tokens” with no regulatory oversight.

Individuals and organizations that have completed ICO fundraisings should make arrangements to return funds and should halt all related fundraising activity immediately, said a joint statement from the People’s Bank of China, the securities and banking regulators and other government departments that was posted on the central bank’s website.

The popularity of coin offerings has surged in China this year, with 65 ICOs and 2.62 billion yuan (US$394.6 million) raised from 105,000 individuals in the country, Xinhua reported in July, quoting data from a government organization that monitors online financial activity.

The People’s Bank of China said it has completed investigations into organizations and individuals who have conducted ICOs, and have ruled that the financing activities disturb financial order and shall be banned.

ICOs — digital token sales that have raised about US$1.6 billion worldwide — have been deemed a threat to China’s financial market stability as authorities are taming financing channels that sprawl beyond traditional banking system.

Widely seen as a way to sidestep venture capital funds and investment banks, ICOs have also increasingly captured the attention of central banks that see the fledgling trend a threat to their reign.

A cross between crowdfunding and an initial public offering, they involve the sale of virtual coins mostly based on the ethereum blockchain, similar to the technology that underpins bitcoin.

But unlike a traditional IPO in which buyers get shares, getting behind a startup’s ICO nets you virtual tokens — like mini-cryptocurrencies — unique to the issuing company or its network. That means they grow in value only if the startup’s business or network proves viable, attracting more people and boosting liquidity.

Launches of new ICOs have shaken up social and economic order, created hidden financial risks, and in some cases may amount to fraud, China’s National Internet Finance Association said in an announcement posted on its website last week.

ICO investors should be wary and report any suspected crimes to police, the State-backed association said.

“Investors should remain clear-headed, increase their alertness and guard against being cheated,” the statement said.

Digital currencies, also called cryptocurrencies, such as bitcoin and a growing stream of alternatives, allow anonymous peer-to-peer transactions without the need for banks or central banks. They are also used by companies seeking to raise capital, in the form of initial coin offerings or initial token offerings (ITOs).(SD-Agencies)

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